The Australian Securities and Investments Commission has published a review finding that cash settlements were used in at least 63% of examined home building insurance claims, while consumers often lacked enough information to assess whether accepting cash was in their interests. The regulator identified risks that settlement amounts may not cover repairs, vulnerable consumers may receive inadequate support and insurers may fail to monitor outcomes because of poor data. The review covered five insurers representing about 65% of the home insurance market and examined claims arising from Cyclone Jasper and a normal operating period. For Cyclone Jasper claims, 52% of cash offers were based on one quote, of which 73% came from an insurer’s preferred supplier, and no insurer consistently added a contingency to reflect market pricing or risks transferred to consumers. Four of the five insurers showed shortcomings in supporting vulnerable consumers, while none systematically captured why claims were cash settled. ASIC expects insurers to base offers on realistically obtainable market prices, provide clear information on settlement components and review rights, improve support where damage is excluded, identify vulnerable customers and collect detailed settlement data.
2026-08-31Australian Securities & Investments Commission
Australian Securities and Investments Commission identifies shortcomings in home insurance cash settlements used in at least 63% of reviewed claims
The Australian Securities and Investments Commission found that cash settlements featured in at least 63% of reviewed home insurance claims, but offers and disclosures may not support fair consumer outcomes. Key shortcomings included reliance on preferred-supplier quotes, weak support for vulnerable consumers and inadequate data on settlement reasons and outcomes.